Online retailer Wayfair has predicted it could take a “few months” to restore inventory levels as “supply chain bottlenecks” lead to delays in orders.
On a company earnings call, Steve Conine, co-founder of Wayfair, told investors the “well-documented pressure and lack of availability on ocean freight” was “amplifying the backlog of orders flowing to North America and Europe”.
“At current levels of demand, we expect the industry to reach more normalised inventory levels by the summer of this year.”
Niraj Shah, CEO of Wayfair, added disruption at ports was “delaying the timeframe” to get back to the amount of product availability they would like.
He said: “A lot of suppliers have item finished goods that have already been produced and sitting in Asia, that they have not been able to move, or factories are not able to produce goods because they're still storing other finished goods.
“Without the ocean freight congestion, maybe we’d be getting back to those in-stock levels in the next month or two, and instead, I think it will take an extra quarter to a few months to really get to the high in-stock levels.”
Shah’s comments come as analysts warn container delays have increased to around five days.
However, Shah added the firm’s freight brokerage offering, International Supply Chain, had carried “just under 50,000 TEUs” last year, but Wayfair expects to increase volume by 50% to 100% in the coming year.
“We have been able to continue to secure capacity, and the pricing we have is far below the current spot market and our suppliers who are then using that offering are benefiting because they have had that price stability, and they can continue to move goods,” he said.
Last month, Peloton announced it was investing $100m in its supply chain as a result of port disruption causing “significant delays” to orders.
Data from data intelligence firm Ocean Insights found in January 2021, the average delay for containers increased to more than five days, compared with one day in January 2020.
The firm warned it may take “several more months for supply chains to return to some semblance of normality”.
The issue has extended to ports around the world. Delays for container vessels at Singapore port have been estimated to have grown to 5-7 days, a source told analysts at S&P Global.
Meanwhile, analysts have said Walmart has beaten the likes of Amazon when it comes to avoiding the impact of port disruption in the US.
William George, an analyst at Import Genius, told delegates at FreightWaves Global Supply Chain Week Amazon shipments were highly concentrated at the ports of Los Angeles and Long Beach, where congestion has been focused.
George said: “It looks to me like Walmart is handling both Covid and the congestion much more smoothly than Amazon is. And I think this has to do with just the depth of expertise that Walmart has in their supply chain. They have so many years worth of experience. It’s a very mature supply chain.”
Port disruption has also impacted cargo theft patterns, with criminals increasingly targeting ports and warehouses, according to a report.
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